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Arabica Coffee Hits $3.5 per lb Record High Amid US-Colombia Tariff Dispute, Up 80%

Jan 27, 2025, 02:39 PM

Arabica coffee futures reached a new record high of $3.5 per lb after a brief US tariff threat against Colombia added to trade uncertainties in a market already facing tight global supplies. The threat came from US President Donald Trump, who ordered tariffs and sanctions on Colombia over a diplomatic dispute regarding the landing of military planes carrying deported migrants. The tariffs were later suspended after an agreement was reached. Colombia, the world's third-largest coffee producer and second-largest for arabica, exports at least 40% of its coffee to the US, making it a significant market. The price increase, which marks an 80% rise from a year ago, reflects broader concerns about supply shortages, with the US Department of Agriculture projecting global coffee stockpiles to reach a 25-year low in the 2024-25 season. The situation has put at risk 560,000 coffee-growing families in Colombia.